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| Author: | Burguet, R. Che, Y-K. |
| Title: | Competitive procurement with corruption |
| Journal: | RAND Journal of Economics
2004 : SPRING, VOL. 35:1, p. 50-68 |
| Index terms: | Bribery Corruption |
| Freeterms: | Competitive procurement |
| Language: | eng |
| Abstract: | Competitive procurement administered by a corrupt agent who is willing to manipulate his evaluation of contract proposals in exchange for bribes is studied in this aticle. With complete information and no corruption, the efficient company will win the contract for sure. If the agent is corrupt and has large manipulation power, however, bribery makes it costly for the efficient company to secure a sure win, so in equilibrium the efficient company loses the contract with positive probability. The optimal scoring rule for the buyer deemphasizes quality relative to price and does not fully handicap, and many even favour, the efficient company. |
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